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Strategies & Market Trends : Dividend investing for retirement

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To: Ditchdigger who wrote (13395)	12/12/2012 12:11:17 PM
From: Jacob Snyder	2 Recommendations Read Replies (1) of 34328

GE vs. SI: Siemens is the "European GE". Both are old huge manufacturing conglomerates. They directly compete in a list of products. I used to own GE, but have switched to SI. My thinking on this changed gradually, beginning in 2008. SI never cut their dividend, while GE did. During the last recession and its aftermath, it slowly became clear to me that GE's reputation for quality management was not deserved. They had achieved profit growth, but at the cost of assuming huge risks. These risks were not disclosed or understood by management, or investors (including me). They had engaged in a lot of extremely complicated financial engineering, when their core competence was old-fashioned engineering. They had turned themselves into a leveraged bank, with opaque accounting. Companies this big, and this old, don't change their culture. I am not convinced the near-death experience of 2008-9 was sufficient to make them stop taking those unacceptable risks. SI has all the strengths of GE, without the weaknesses.

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